"High capital expenditures emerged as a primary drag, with the company guiding for $200 billion in 2026 spending - mostly on AI and data center infrastructure . This figure, up from $131 billion in 2025, raised fears of margin compression and negative free cash flow, prompting analyst downgrades and target cuts. AWS growth, while accelerating to 24% in Q4, lagged rivals like Microsoft ( NASDAQ:MSFT ) and Google, fueling doubts about Amazon's AI competitiveness."
"But 2025 brought challenges, with the stock up just 5% for the year amid economic pressures and competitive concerns. However, since last August, shares have mostly traded between $220 and $240 per share, though they briefly hit $254 in November before falling. Wall Street's consensus price target stands at $289 per share, suggesting about 40% upside from the current $207 level."
Amazon recovered significantly after 2022 losses, with shares rising 80% in 2023 and 44% in 2024, but returned only 5% in 2025 amid economic and competitive headwinds. The stock has traded mostly between $220 and $240 since August, briefly peaking at $254. Wall Street's consensus target of $289 implies roughly 40% upside from a $207 price. Planned capital expenditures are set to rise to about $200 billion in 2026 from $131 billion in 2025, focused on AI and data-center infrastructure, raising margin and free-cash-flow concerns. AWS grew 24% in Q4 but trailed major rivals, and broader macro risks pressure e-commerce margins. A sum-of-the-parts perspective suggests the combined e-commerce, cloud, and advertising/media assets could be worth more than current market pricing indicates.
Read at 24/7 Wall St.
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